On Jan. 23, 2008, the pharmaceutical company Novartis threw a party at a restaurant on Long Island. The party, which cost $1,250, was ostensibly for doctors to learn about cardiovascular drugs made by the company, with Novartis sales representatives present as well.

But no doctors ever came, according to a whistleblower lawsuit against Novartis that was unsealed last week. Instead, nine sales reps ran up the tab, and the company wrote an honorarium check to Dr. Robert Nissan, a Long Island family practitioner who wasn’t present, the lawsuit alleges.

The party, the lawsuit maintains, was one of “countless” events held by Novartis over a decade that were designed to direct kickbacks — cash, meals and favors to relatives — to doctors who prescribed the company’s drugs.

Last week, the Department of Justice joined the whistleblower lawsuit, which was originally filed in 2011 by Oswald Bilotta, a former Novartis sales representative on Long Island. “Novartis corrupted the prescription drug dispensing process with multi-million dollar ‘incentive programs’ that targeted doctors who, in exchange for illegal kickbacks, steered patients toward its drugs,” Preet Bharara, the U.S. attorney for the Southern District of New York, said in a statement.

Novartis has disputed the government’s allegations of wrongdoing; Nissan did not return several requests for comment.

A number of the doctors named in the Novartis case have received substantial sums since 2009, Dollars for Docs shows, including one physician who was paid more than $150,000 combined from six different drug companies.

Historically, the doctors cited in cases alleging improper marketing have not faced consequences. A ProPublica investigation in 2011 found that none of more than 75 doctors named in lawsuits since 2008 had been sanctioned, despite charges of fraud or conduct that put patients at risk.

Generally, payments like those in Dollars for Docs made for speaking, consulting, travel, meals and other promotional purposes are legal.

Novartis has only publicly reported payments since 2010, when the company pleaded guilty to a misdemeanor and paid $422.5 million to settle charges it had illegally promoted Trileptal, an anti-seizure drug, and had paid kickbacks for prescribing its drugs. Aside from the misdemeanor plea, Novartis denied wrongdoing.

The latest lawsuit is one of two filed last week by the Justice Department against Novartis in U.S. District Court in Manhattan. The company is also accused of paying kickbacks to pharmacies to promote Myfortic, a drug that suppresses the immune system. Novartis — which is bound by a corporate integrity agreement from its 2010 settlement — has disputed the allegations in both cases.

“We disagree with the way the government is characterizing our conduct in both of these matters and we stand behind our Compliance program,” Andre Wyss, the head of Novartis’s U.S. operations, said in a statement.

The whistleblower lawsuit alleges that Lotrel, a blood-pressure medication with sales of nearly $1.3 billion in 2006, “became a big seller for NOVARTIS because it paid physicians to write Lotrel prescriptions.” Novartis sales reps allegedly rewarded doctors with cash or gift checks and recruited them to attend “Clinical Learning Days” with honoraria of $250 to $500 a pop.

The meetings could be as short as half an hour, the whistleblower suit alleges, and doctors would be paid even if they didn’t show up. “So long as a physician was writing Lotrel prescriptions,” it says, “he or she could expect to be paid.”

Thousands of doctors took part in the alleged kickback scheme, according to the whistleblower lawsuit. But the case singles out 24 Long Island doctors and nurses, including Nissan. Nissan and two other physicians — Edward Condon, who specializes in internal medicine, and Mark Jagust, a family practitioner — “each received tens of thousands of dollars” from Novartis, according to the lawsuit.

Novartis also hired Ross Fishberger — the son of Kenneth Fishberger, another one of the doctors named — as a sales representative “in order to assure that Dr. Fishberger continued to prescribe” Lotrel and other Novartis drugs, according to the lawsuit. Novartis also allegedly employed Condon’s wife and daughter-in-law as sales reps.

Reached by ProPublica, Condon said he had no knowledge of the lawsuit, and hung up when asked more detailed questions. Jagust and the elder Fishberger did not respond to repeated requests for comment.

Ross Fishberger declined to comment when reached by ProPublica.

Dollars for Docs shows that drug companies have made payments to many of the 24 doctors named in the whistleblower lawsuit since 2009.

Condon received at least $156,094 in meals, travel, speaking fees and other expenses from six companies, including Novartis. Another doctor, Michael Shanik of Smithtown, N.Y., was paid at least $97,754 from six companies, including more than $30,000 from Novartis.

Robert Mormando, an internal medicine specialist in Port Jefferson Station, N.Y., who was also named in the case, told ProPublica he hadn’t taken any kickbacks and didn’t know of Long Island doctors who had.

“I would say it’s up for interpretation whether paying someone to be part of a speaking program” constitutes a kickback, he said. “I’m not aware of any doctors who have taken it to that level.”

Mormando said he had been a paid speaker for Novartis on three occasions a number of years ago and estimated he had earned between $1,200 and $1,500. According to Dollars for Docs, he was paid at least $9,958 from nine pharmaceutical companies since 2009, only $19 of which came from Novartis.

Another of the named doctors, Howard Hertz of Babylon, N.Y., also denied taking kickbacks in a brief interview. Hertz was paid at least $9,888 since 2010 from five drug companies, including $4,110 from Novartis, according to Dollars for Docs.

The main plank of the Justice Department’s lawsuit is the federal anti-kickback statute, which makes it illegal for drug companies to pay doctors with the intent of getting them to prescribe a particular drug or to reward them for doing so.

Kevin Outterson, a professor at Boston University Law School who has studied health care fraud, said it can difficult to prove intent in pursuing kickback cases.

“What it boils down to is they need smoking gun evidence,” he said.

But Outterson said he thought the Justice Department had a strong case. “It goes directly to the culture of wining and dining and having lavish entertainment and educational events in order to induce prescription writing,” he said.

8 comments

I don’t typically respond to these kind of articles/forums but I found this report particularly troubling. There is clearly a bias against the pharmaceutical industry and it is compounded by either shoddy “gotcha” journalism or simple ignorance of the industry. I can’t help the shoddy journalism but maybe I can shed some light on the more misinformed portions of this article.

You state that there was a “party” - in fact in the industry it is called a speaker program or dinner program. The program cost $1,250 and no doctors showed up but instead 9 reps “ran up the tab”. $1,250 is an unusually tidy number; almost as if that was maybe the minimum charge the restaurant charged for a private room for a large guest list. Maybe no doctors showed up so instead of getting stuck with the bill that was non-refundable the reps ate a dinner which cost $138 per person - which in NY isn’t outrageous. It’s quite possible they invited 10 - 15 docs and for whatever reason no one showed.

You also state in a huff that the physician was paid a fee. If you bothered to look at most contracts there is a clause that if a program is cancelled within a certain period the physician speaker will be compensated for their inconvenience. Basically it’s a cancellation fee.

Whether you approve or not dinner programs are a valuable means for physicians who have experience with using a drug to share their knowledge with colleagues. Or, would you rather have your personal physician just try a new drug out on you based on literature alone?

You also imply these doctors are paid obscene amounts of money but you fail to mention it’s over the course of a number of years by multiple companies. Yes, $156,000 seems like a huge amount of money but that was paid by multiple companies that believe me do not share that kind of information with one another. And, if Dr. Condon was the thought leader in the area he was probably being paid $2000 - $2500 per program which is about 2 speaking engagements a month. Not outrageous by industry standards. And again I ask you, how would you like your personal physician to gain experience with newer agents? Through trial and error on patients such as one of your family members or through peer-to-peer experience?

I will agree that if in fact Novartis actually paid docs to prescribe drugs, provided gifts or offered employment to relatives then they should be strung up on a pole. That is a disgrace to our industry. But I encourage your writers to at least ATTEMPT to present another view point.

Drug companies also can be terribly dishonest if you do not say what they want or they want to steal your data. I had worked for Medicis for many years and developed the injection techniques for both Restylane and Perlane. In regards moneys owed me by Medicis they never paid me .Medicis had employed Jean and Alastair Carruthers and paid them to inject and teach in the USA. This is highly illegal in that they had neither a green card nor a license. They even allowed Jean Carruthers to present my data as her own at Johns Hopkins and hold a consensus conference on Restylane.I invented lip augmentation in 1984 and this is my intellectual property. Maybe not a big deal but mine. I did a lip study for Medicis and had spent over 40 hours rewriting the lip paper with the assistance of Joe Burns to assure it was written by me and not authored totally by someone at Medicis. I had replaced the diagrams in this paper on several occasions. Frequently in lip articles the lip evaluation lines are put in the wrong place. I felt the paper had to be as accurate as possible. I also warned Medicis not to present this data to the FDA in that it contains my personal injection techniques.which are my intellectual property,It is very unusual for someone else to present the data from another doctor but someone did present my data to the FDA to expand the lip study. Medicis was now on to using people with political positions in Dermatology such as Drs. Ron Moy*, Rhoda Narins* and Gary Monheit* as consultants. Since Pharmaceutical companies like Medicis wanted presentations at meetings and these people planned the meetings and control the Dermatologic Journals they could remain one happy family. Well Medicis was recently sold to Valeant Pharmaceuticals for 1.6 billion dollars. Medici’s largest selling product is Restylane and its greatest use is lip augmentation. Did they ever pay what may amount to now 100 million dollars? No. Why? Because the entire payment they owe me was embezzled by a group of thieves.
Now this study was owned by minimally invasive aesthetics a company a colleage and I own that donates heavily to Charity and has a great art collection….watch the embezzlers in action;

We entered into a global settlement of your claims v. Medicis.
I understand that you wrote the president of Medicis recently discussing your earlier relationship with that company.
As part of the settlement, we negotiated a “good faith” discussion requirement where Medicis is required to meet with you in “good faith” to discuss future consulting relationships, etc.
understand that Medicis has already contacted Muhammad and started the process of discussing a forward relationship between you and the company.

IT IS NOT DOING YOU ANY GOOD to write to the president of the company at this time to discuss old business, and, in fact, it might be hurting your chances of entering into an economically beneficial future relationship.

Not that I have any faith in the pharmaceutical industry, which cries poverty all the time and pulls some of the shadiest business deals I’ve ever seen (most recently, trying to contract with pharmacists to block sale of generic blood pressure medication as patents expired), but…I don’t know, I always expected the payouts to be more than this. Thirty thousand from Novartis to become their evangelist and salesman hardly seems worth the potential career blowback.

I say that as someone outside of the medical field, where a payment like that would be a fair portion of my salary. But that means, what, when I’m thrown out, I can wait maybe six months before looking for a new job? And this is paid out over multiple years? If it wouldn’t be worth it for me, why are doctors biting?

I was a drug rep for a major drug company for 10 years. There’s lots of physician entertainment paid for by the drug companies which comes in many forms. The answer to “why” is obvious. Sell as much of our product as possible. I had a $5k/month “allowance” just to pay for lunches, dinners, etc.. If I didn’t use it, it was assumed that I wasn’t spreading enough “influence”.

However, to be fair, out of the thousands of docs I sold our drugs to, only a handful were clearly in the relationship for the perks that came with association with a powerful pharmaceutical company, and susceptible to using our drugs inappropriately, or when unnecessary. 99% of those I met would never even consider that. They might accept the perks, sure. But the vast majority of the time there was never any “quid pro quo”, and it was never really expected.

We were just there to plant an idea to use our product if it was as good or better than our competitor’s, and didn’t cost too much more.

Overall, I found the medical profession to be completely worthy of it’s reputation for integrity. And I’m a very cynical person.

I would like to bring yet another case that involves a drug manufactured by Novartis..Zometa. The IV form drug in suppose to build and strengthen bones in people with degenerative bone disease. My sister, Trish, went to the doctor in Little Rock, Ar every month for 2 years and was shot up with a bag full of it directly in to her blood stream. Little did we know that Novartis hid and lied and covered up the fact that their drug causes osteonecrosis in the jaw. I had to sit and watch my sister take tweezers and pull dime to quarter size loose chunks of her jaw bone out of her own mouth. Then when she had gone to see her oncologist, (she was in remission from kidney cancer) we discovered that the Zometa medication has metasisized the cancer which had now returned, and was in her bones and she was givin a life expectancy time limit. Through deeper investigation Novartis HID facts from the FDA about the side effects of the drug which included osteonecrosis, in order to get the FDA to approve the drug, and place it on the market. Novartis got caught and a few thousand people have filed suit against Novartis. But NO amount of settlement can bring my loving, kind, sweet sister back. She has grandchildren that will never get to know her, celebrate their milestones with her, not to mention that the whole ordeal could have been prevented if Novartis had just been honest and not lied. Why is this drug companies products still allowed and sold in the U.S.? Their hunger for money cost numerous people their lives. Rest in Peace Trish.

Pharmaceutical companies have been paying off doctors and pharmacies for years and continue to do it. They use the ‘educational” tactic as the premise for this fraud.
Sales representatives provide NO benefit to the patient or the physician nor his staff. What they do provide is a biased unscientific presentation , taught from non medical marketing personnel at company headquarters.
The presentation of studies paid for by drug companies is another fraud that is being exposed.
The fines to the companies and Board of Directors need to be in the Billions in order for these pracitces to change since most of the Companies consider million dollar fines a drop in the bucket and a “cost of doing business in America” expense.
Case in point, Novartis and its Co owned corporate criminal sister company, Hoffman La Roche (Genentech) are both Swiss companies. Both companies have been committing crimes in the United States for years. The latest scam was inflating the Average Wholesale Price (AWP) in order to steal from the states medicaid funds.
If this tactic was used by a local company the owners would be sent to Federal Prison.
Lets hope the Justice Department calls in the Board of Directors and the ‘Big Fish” of Novartis and Roche to face charges personally. Only then will the corruption stop from these SWISS companies who steal from American taxpayers.

ProPublica is tracking the financial ties between doctors and medical companies.

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ProPublica is investigating the financial ties between the medical community and the drug and device industry. In October 2010, ProPublica compiled the list of payments that drug companies make to physicians and built a publicly searchable database so that patients could look up their doctors.

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